The head of the Business Council of Canada delivered what he called a “wake up call” on Wednesday, urging the federal government to focus on fiscal responsibility to help boost economic growth in Canada.

In a speech to the Canadian Club Toronto, Business Council of Canada president and chief executive Goldy Hyder outlined three top priorities that the country’s leaders should focus on in order to “shake ourselves out of this complacency and awaken a Canadian economic drive.” The top priorities, aimed largely at the federal government, include making the most of Canada’s natural resources, leveraging the country’s relationship with the United States and getting Canada’s fiscal house in order.

“Our considerable competitive advantages have lulled us into a sense of complacency. We’re content with settling for ‘good enough’,” Hyder said on Wednesday.

“We have lost the drive to build big things, to celebrate our successes (and to work) towards a common vision of prosperity for ourselves and generations to come… We need to wake up and get moving on our own projects.”

While Hyder’s speech offered a broad range of recommendations for business and government leaders, one of his key focuses for the federal government included fiscal discipline. He said that “awakening our economic giant requires us to have our fiscal house in order.”

“Our federal debt has more than doubled over the last three years,” he said. “We simply can’t keep spending money that we don’t have.”

Hyder’s speech came the day after he sent a letter to federal Finance Minister Chrystia Freeland on behalf of the Business Council, urging her to adopt a new fiscal anchor in the government’s next economic update that would limit debt servicing costs to a maximum of 10 per cent of government revenue going forward.

“By doing this, you will preserve the government’s capacity to fund programs Canadians rely on and not put an excessive and unfair fiscal burden on future generations,” Hyder wrote, adding that deficit-financed spending at higher interest rates will force future governments to cut spending and raise taxes, among other things. He noted that the yield on a 10-year Government of Canada bond is around 4 per cent, up from 2.8 per cent six months ago, meaning debt servicing costs are “more prohibitive” than previously forecast.

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“It will lead to a weakened economy with considerable uncertainty for businesses looking to invest, hire and grow in Canada,” Hyder wrote.

“It will also put in jeopardy the social programs Canadians value. This is precisely what we must avoid.”

He also recommended avoiding funding new spending – including possibly on housing and a new national pharmacare program – with borrowed money, as it “will only exacerbate the precarity of our public finances.”

The federal government has not yet announced a date for the fall fiscal update. Last year’s fall economic update was in November.

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.

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